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Court rules against democracy challenge of B.C. Conflict of Interest Commissioner’s decision on Premier Clark’s $50,000 salary and “cash-for-access” events

Ruling means complaints to Conflicts Commissioner by members of the public about the Premier or government Ministers are ‘an effectively meaningless dead end’. Democracy Watch may well appeal and intends to explore other legal avenues for challenging Premier Clark’s conflicts of interest

B.C. political parties should make Commissioner’s ruling binding and allow appeals to court, and should also democratize province’s political finance system to match Quebec’s $100 annual donation limit and other world-leading measures

Wednesday, January 25, 2017

OTTAWA – Today, Democracy Watch responded to B.C. Supreme Court Justice Affleck’s ruling (PDF) that no court challenges are allowed of B.C. Conflict of Interest Commissioner Paul Fraser’s decisions because they are unreviewable opinions with no direct legal effect limiting the Premier’s conflicts of interest.

The ruling means that members of the public who make a complaint to the Commissioner about the Premier’s conflicts of interest are not entitled to a remedy, and are not even entitled to any assurance that the Commissioner himself has not been compromised by his own conflict of interest.

Commissioner Fraser filed a motion to stop Democracy Watch’s court case filed last October challenging the Commissioner’s decisions last May and August that Premier Christy Clark’s high-priced, exclusive fundraising events don’t create conflicts of interest for her, and that the donations made at the events do not benefit her personally.

“The court has unfortunately decided that no one can challenge Commissioner Fraser’s unethical decision that it is legal and ethical for Premier Clark and Liberal Cabinet ministers to sell access to themselves at high-priced, invite-only secretive fundraising events, and that the events don’t create any conflicts of interest,” said Duff Conacher, Co-founder of Democracy Watch. “Commissioner Fraser stepped aside from ruling on a situation involving Premier Clark in 2012 because of his son’s work with the B.C. Liberals, and he should have stepped aside again this time. Democracy Watch is not prepared to let this issue go because the corrupting influence of big money donations in B.C. politics must be stopped.”

Jason Gratl of the law firm Gratl and Company, who is Democracy Watch’s counsel for the case, said: “The judge accepted the Commissioner’s submission that the Commissioner lacks any statutory authority to declare conflicts of interest or limit the power of the government executive. If that is true, then the Commissioner’s office holds little or no promise as a mechanism for public complaints about corruption. We will have to explore other legal avenues to challenge Premier Clark’s conflicts of interest and will seriously consider appealing the ruling.”

Democracy Watch’s case also asked the court to rule that Commissioner Fraser should not have ruled on the complaints filed about the events because he was in a conflict of interest given that his son works as a deputy minister for the B.C. Liberal Cabinet. In 2012, Commissioner Fraser stepped aside and didn’t rule on a complaint filed about Premier Clark because of his son’s connection to the B.C. Liberals. Democracy Watch wanted the court to order a reexamination of the complaints by another person who is fully independent of all B.C. political parties. Justice Affleck did not consider this issue in his ruling.

According to media reports, Premier Clark has hosted or attended several small, invitation-only undraising events for the B.C. Liberals with ticket prices ranging from $2,000 to $20,000, and also attended an event in her riding association sponsored for $2,500 each by four sponsors. Premier Clark received an annual salary from the B.C. Liberals for, in part, fundraising activities over the past few years, and that is part of the reason she is in a conflict of interest.

The B.C. Members’ Conflict of Interest Act prohibits the Premier and all MLAs from exercising their official powers or performing any official duties or functions if they have an opportunity to further their private interest or if there is a reasonable perception that their private interest affects their actions or decisions (sections 2 and 3). It also prohibits them from receiving any gift or personal benefit directly or indirectly connected to their position (sections 7).

Democracy Watch, which filed a complaint with Commissioner Fraser about the Premier’s fundraising events last March, takes the position that Premier Clark benefited personally and was in a conflict of interest when attending the events because she receives some of the money raised as her salary from the B.C. Liberal Party. Democracy Watch’s position is also that the events created ongoing conflicts of interest for Premier Clark that prohibit her from making decisions that affect any company or organization that had a representative at any of the events.

Commissioner Fraser ruled on May 4 and August 9, 2016 that the donations made at the events did not benefit Premier Clark personally, and did not amount to a private interest that put her in a conflict of interest. He essentially refused to rule on whether the donations created ongoing conflicts of interest for Premier Clark when she is making policy decisions that affect the donors – he didn’t even investigate to find out who attended the events.

“Democracy Watch’s position is that big donations made at private fundraising events where the politician is essentially selling access to themselves are a clear violation of the conflict-of-interest law, and we hope the B.C. Supreme Court will agree and overrule Commissioner Fraser’s decision that the donations didn’t benefit Premier Clark or put her in a conflict of interest,” said Conacher. “Commissioner Fraser stepped aside from ruling on a situation involving Premier Clark in 2012 because of his son’s work with the B.C. Liberals, and he should have stepped aside again this time. Commissioner Fraser’s apparent conflict of interest and the legal errors in his ruling give the higher courts many reasons to reject his ruling on Premier Clark’s fundraising events.”

Democracy Watch and the nation-wide Government Ethics Coalition also called on B.C.’s political parties to change the Conflict of Interest Act to make the Commissioner’s rulings clearly binding on politicians, and also to allow anyone to appeal to the courts for a review of any decision by the Commissioner.

“It is dangerously undemocratic for B.C. to have an ethics law that politicians can ignore, and an ethics commissioner who is an unaccountable czar, and so B.C.’s political ethics law must be changed to make the commissioner’s rulings binding, and to allow court challenges of the commissioner’s rulings,” said Conacher.

Democracy Watch and the nation-wide Money in Politics Coalition also called on the B.C. government to make the same world-leading changes to the province’s political donation system (including at the municipal level) as Quebec made in 2013 when it lowered its individual donation limit to $100 annually to each party, with an additional $100 allowed to be donated to an independent candidate, and required donations to be verified by Elections Quebec before being transferred to parties and candidates.

Political finance systems across Canada, other than Quebec’s provincial system, are all undemocratic in various ways. B.C. (along with Newfoundland and Labrador, Prince Edward Island, and the Yukon) have the most undemocratic political finance systems in Canada as they allow unlimited donations from corporations, unions and other organizations, and individuals, even if they are not located in or don’t live in the jurisdiction. Saskatchewan is almost as bad, with the only difference being that individual donors have to be a Canadian citizen.

New Brunswick, Nunavut and the Northwest Territories are also almost as bad because they allow undemocratically high donations from corporations, unions and organizations (and New Brunswick allows those donations to come from outside the province).

And while the federal government, Alberta, Manitoba, Ontario and Nova Scotia have banned corporate and union donations, they still allow undemocratically high donations that only wealthy people can afford.

“As Quebec and federal donation scandals show clearly, the only way to stop the unethical, undemocratic influence of money in politics is to stop big money donations by lowering the donation limit to $100-$200,” said Conacher.

Few have been charged in Quebec’s corruption scandal even though an Elections Quebec audit found $12.8 million in likely illegally funneled donations from 2006-2011. To stop the corruption, in 2013 Quebec lowered its individual donation limit to $100 annually to each party, with an additional $100 allowed to be donated to an independent candidate), and required donations to be verified by Elections Quebec before being transferred to parties and candidates. Ontario should make the same democratic changes.

At the federal level, SNC-Lavalin illegally funneled almost $118,000 to the Liberal and Conservative parties, riding associations and candidates through its executives and employees from 2004 to 2011. And former-Conservative MP Dean Del Mastro’s cousin was charged in 2014 with illegally funneling donations through his business’ employees.

There are likely many more examples of illegally funneling of donations at the federal level, as it seems Elections Canada has not yet done the full audit it promised to do in 2013. As in Quebec, when Elections Alberta did an audit in 2012 it found dozens of illegal donations.

As well, the federal Liberals have been recently caught in a cash-for-access scandal as Prime Minister Trudeau and several Cabinet ministers have attended about 90 high-priced, exclusive events since January 1, 2016. And, as the Globe and Mail reported on October 25th, one of the events was a fundraising event to be attended by the Finance Minister that a drug company executive helped to organize while his company is lobbying the Finance department. Democracy Watch filed a complaint about the event with the federal Lobbying Commissioner who is investigating, and also a complaint about another event the same drug company executive organized for Justin Trudeau in August 2015.

The results of Democracy Watch’s research also show that top federal Liberal Party donors (to the Party only, not its riding associations) who gave $1,100 or more in 2015 were only 4.37% of total donors (4,084 donors out of 93,426 donors total) but they gave the Party 22.87% of total donations raised ($4,866,373.76 out of the $21,276,897.57 total raised.

As well, the federal Liberals hold special events for donors who donate $1,500 or more annually (they become members of the exclusive Laurier Club). As the Globe and Mail reported recently, based on Elections Canada figures only 790 people (0.85% of all donors to the Liberals) donated $1,500 or more in 2015, and in 2014 only 522 people (0.68% out of 77,064 total donors) donated $1,200 or more (the amount needed in 2014 to qualify to attend a Laurier Club event).

Toronto’s experience is another example of how high donation limits allow donors to get around bans of corporate and union donations. Such donations were banned in Toronto elections in 2009, and individual donations limited to $750 annually, but a 2016 analysis by the Toronto Star found that big business and other special interest group executives and their families continue to give large amounts to city councillors.

“Any political party that refuses to make changes to stop big money in politics is essentially admitting they are up for sale and that they approve of the unethical and undemocratic best-government-money-can-buy approach to politics,” said Conacher. “The only way to stop the unethical and undemocratic influence of big money in B.C. politics is to stop big money donations.”

The key changes that must be made in B.C. to democratize its political finance system are as follows follows (and similar changes should be made province-wide to the municipal political finance system, taking into account that many municipalities do not have political parties):

  1. ban donations by corporations, unions and other organizations (Quebec enacted such a ban in the late 1970s);
  2. limit annual combined total donations of money, property and services by individuals to $100-200 to each party (Quebec’s limit is $100), and establish the same limit on candidates donating to their own campaign, with donations routed through the election watchdog agency (as in Quebec);
  3. prohibit loans to political parties, riding associations and candidates, except from a public fund (with loans limited to the average annual amount of donations received during the previous two years);
  4. limit spending leading up to, and during election campaigns by parties, nomination race and election candidates, third party interest groups, and also candidates in party leadership races;
  5. require disclosure of all donations and gifts of money, property, services and volunteer labour given to any party, riding association, politician, nomination race, election or party leadership candidate, including the identity of the donor’s employer, and board and executive affiliations (and the identity of anyone who assists with any fundraising or fundraising event);
  6. give annual public funding for parties based on each vote received during the last election (no more than $1 per vote, with a portion required to be shared with riding associations);
  7. give annual public funding for parties matching up to the first $500,000 raised (as in Quebec where the first $200,000 raised is matched);
  8. give public funding matching up to $25,000 that each nomination race and election candidate (including an independent candidate) raises (similar to Quebec’s matching funding system), and public funding matching up to $100,000 that each party leadership campaign candidate raises, and;
  9. require election, donation and ethics watchdogs to conduct annual random audits to ensure all the rules are being followed by everyone;
  10. Elections B.C., or the Auditor General, must be empowered to review all government advertising and to stop or change any ad that is partisan or misleading;
  11. all penalties for violating donation and spending rules must be increased to minimum $100,000 fine and a multi-year jail term, and loss of any severance payment, and a partial clawback of any pension payments, and;
  12. Elections B.C. must be required to disclose the rulings they make on all complaints they receive as soon as they make the ruling, and to disclose the rulings they make on all investigations they initiate themselves.

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Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
[email protected]

Jason Gratl, Gratl and Company
Tel: 604-694-1919

Democracy Watch’s Government Ethics Campaign and Money in Politics Campaign